TCS rallies 4%, hits lifetime high; market cap crosses Rs 15 trillion

Tata Consultancy Services (TCS) became the second listed Indian company to cross Rs 15 trillion market capitalisation (market cap), as stock price of information technology (IT) giant rallied 4 per cent to hit a lifetime high of Rs 4,135.90 on the BSE in Tuesday’s intra-day trade. TCS’s market cap hit Rs 15.13 trillion in intra-day deals today.

The stock of Tata Group company surpassed its previous high of Rs 4,045.50 touched on January 18, 2022. At 11:44 am; with Rs 15 trillion market cap TCS stands at number two position in overall ranking. Reliance Industries is on top of the list with a market cap of Rs 19.35 trillion, BSE data shows.

In past one month, TCS has outperformed the market by surging 12 per cent on encouraging deal wins during October-December quarter (Q3FY24). The total contract value (TCV) came in at $8.1 billion, up 3.8 per cent from $7.8 billion it signed in the Q3FY23. The management remains confident of long-term growth given strong TCV and optimism on clients scaling-up investments after the challenging macro conditions subside.

Meanwhile, TCS on Monday announced that the company has been selected as a strategic partner by Europ Assistance, a leading global assistance and travel insurance company, to help reimagine its global IT operating model for enhanced resilience, scalability and user experience.

Last month TCS said it is extending by 15 years its partnership with Aviva to “transform” the UK-based based insurance, wealth, and retirement business company’s business and customer experience.

Financial details of the deal were not disclosed but industry experts said it could be a significant one for TCS, which provides IT services. The two companies have worked together for some 20 years, the Business Standard reported.

Given the size of the company, key deal wins, focus on enhancing capabilities in key demand areas, analysts at KRChoksey Shares and Securities believe that TCS will be able to navigate the current macro-economic conditions. The stock is trading close to its target price of Rs 4,151.

The brokerage firm Motilal Oswal Financial Services (MOFSL) has a target price of Rs 4,250 on TCS. Given its size, order book and exposure to long-duration orders and portfolio, TCS is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth, the brokerage firm said in Q3 result update.

Owing to its steadfast market leadership position and best-in-class execution, the company has been able to maintain its industry-leading margin and demonstrate superior return ratios, MOFSL said.

Meanwhile, analysts at Elara Capital maintain BUY rating with target price of Rs 4,430 per share as TCS offers best earnings stability among peers, supported by margin resilience, strong delivery engine, robust partnerships with hyperscalers and sturdy deal wins, the brokerage believes.

TCS demand outlook can turn positive as investments in digitization currently lag requirement. With supply-side situation easing, and pickup in Manufacturing, Energy-Resources, Life-Sciences, and consumer business group, investments are only awaiting consumer confidence to turn positive as and when signs of improving macro percolate, the brokerage firm said in Q3 result update.